Forint Advances Second Day as Bonds Rise on Hungary Aid Prospect - BusinessWeek

Wednesday, January 18, 2012

Jan. 18 (Bloomberg) -- The forint gained for a second day and Hungarian bonds rallied on speculation the government will accept conditions imposed by the European Union and the International Monetary Fund in return for a bailout.

Hungary’s currency appreciated as much as 1.5 percent and traded 0.9 percent higher at 306.5 per euro by 10:04 a.m. in Budapest. A close at that level would be the strongest since Dec. 27. The government’s benchmark 10-year bonds rallied for the first time in four days, cutting the yield 13 basis points, or 0.13 percentage point, to 9.651 percent.

The European Union yesterday threatened a lawsuit against Hungary for encroaching on the central bank’s independence, pressing Prime Minister Viktor Orban to resolve a dispute that halted talks on international aid for the country. Hungary is ready to comply with demands from the European Union over the central bank, Bild reported, citing an interview with Orban.

“The prime minister told the foreign press that all will be fine with the legislation which had been criticised, and that caused the rally,” Miklos Kolba, the Budapest-based head of foreign currency trading at ING Groep NV, said in comments sent by e-mail.

Orban is scheduled to speak at the European Parliament today. He has asked to speak to defend the country against “lies and groundless accusations,” his spokesman, Peter Szijjarto, said in a statement on Jan. 16.

“We will bow to power, not to the arguments,” Orban told Bild in the interview.

Legal Action

The EU commission’s concerns about Hungary’s central-bank independence stem partly from the country’s Magyar Nemzeti Bank law, which includes provisions that allow ministerial participation in meetings of the monetary council, requires agendas to be sent to the government in advance and oblige council members to take an oath of fidelity to the nation. The commission also expressed doubts about Hungary’s rules for dismissing the president of the central bank and monetary council members.

The EU also threatened legal action over measures which may curb the independence of Hungary’s judiciary and data protection authority.

“The process is simple: either the prime minister accepts that changes are required and the market can breathe a sigh of relief or the premier tries to negotiate,” Benoit Anne and Guillaume Salomon, London-based emerging-market strategists at Societe Generale SA, wrote in a research report today. “The latter would be very bad news.”

--Editors: Linda Shen, Balazs Penz

To contact the reporter on this story: Andras Gergely in Budapest at agergely@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net

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Liberia's Sirleaf takes oath for second term, promises reconciliation - Christian Science Monitor

Tuesday, January 17, 2012

President Ellen Johnson Sirleaf pledged to work harder toward achieving national reconciliation at her second inauguration ceremony today in Liberia, a nation that emerged from civil war nearly a decade ago.

The ceremony itself showed some progress toward that goal: The top leaders of the main opposition party, Congress for Democratic Change (CDC), agreed to attend the inauguration after striking a deal with the ruling Unity Party over the weekend to recognize Ms. Sirleaf as president. The CDC had boycotted the second round of elections due to claims of electoral fraud.

While the show of unity augers well for Liberia's reconciliation efforts, challenges remain. Negotiations are still ongoing to determine what role the CDC may play in the upcoming government. And there is plenty of unhappiness with the opposition's decision to recognize Sirleaf among the rank and file, particularly unemployed youth and ex-combatants from the 14 years of civil war who feel they have not benefited from her government.

“The decision offers prospects for building political coexistence between the opposition and the Unity Party,” says Dan Sayree, director of the Liberian Institute for Democracy in Monrovia. “It offers hope for Liberian democracy and political stability.”

But he added that Sirleaf needed to address some of the concerns of CDC supporters many of who feel they haven’t benefited from the nation’s development.

“Her focus on youth and whether this will take the form of legislation that can be handed on between governments or whether it will be a means for recruiting young people into the party remains to be seen,” Sayree says.

Sirleaf’s inaugural message was directed at the youth in particular, many of whom rioted in the streets of Monrovia last month to express their anger at the government's late payment of casual workers' wages.

“The youth of Liberia are our future and they sent us a message,” said Sirleaf. “They are impatient, they are eager to be rid the years of conflict and deprivation, they are anxious to know that their homeland offers a ground for hope. Let me say to them, we heard that message. It is our solemn obligation to ensure that their hope will not be in vain.”

US Secretary of State Hilary Clinton and numerous presidents of West African states attended the ceremony in the capital of Monrovia. They were joined by the CDC chief Winston Tubman, a Harvard-educated lawyer, and his No. 2, soccer legend George Weah.

When asked why the party leadership had decided to attend the event Mr. Tubman said the party leadership was there to demonstrate its commitment to reconciliation and political unity.

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